Lamb Weston Reports 2.9% Net Sales Increase but 63% Drop in Net Income for Quarter

Lamb Weston Holdings, Inc. reported its financial results for the thirteen and thirty-nine weeks ended February 22, 2026, revealing a net sales increase of 2.9% to $1,564.8 million for the quarter, compared to $1,520.5 million in the same period last year. For the first three quarters of fiscal 2026, net sales rose to $4,842.2 million, up from $4,775.5 million in the prior year. However, net income for the quarter fell to $54.0 million, a decrease of 63% from $146.0 million in the previous year, while year-to-date net income also declined to $180.4 million from $237.3 million.

The company's gross profit for the quarter was $331.6 million, down from $422.5 million a year earlier, primarily due to unfavorable price/mix dynamics and a $32.5 million write-off of excess raw potatoes in the International segment. Selling, general, and administrative expenses decreased to $156.8 million from $164.2 million, reflecting ongoing cost savings initiatives. The company also recorded $48.2 million in restructuring expenses, significantly higher than the $9.6 million reported in the same quarter last year, as part of its Cost Savings Program aimed at improving operational efficiency.

Operationally, Lamb Weston experienced a 7% increase in total volume for the quarter, driven by customer wins and strong retention, particularly in the North American market. However, the International segment faced challenges, with a 1% decline in net sales attributed to softer demand in key markets and competitive pressures. The company has taken steps to consolidate production by closing its Munro, Argentina facility and temporarily curtailing a production line in the Netherlands to enhance asset utilization.

Looking ahead, Lamb Weston remains focused on executing its strategic priorities, including its Cost Savings Program, which aims to achieve at least $250 million in cost reductions by fiscal year-end 2028. The company anticipates that ongoing geopolitical tensions and market volatility may impact its fourth-quarter results, particularly in the International segment. Despite these challenges, Lamb Weston maintains a strong balance sheet, with $57.5 million in cash and cash equivalents and $1,263.6 million available under its revolving credit facility, positioning it well to meet its operational needs and strategic investments.